Report and Recommendation of the President to the Board of Directors Project Number: 53421-001 May 2021 Proposed Multitranche Financing Facility Solomon Islands: Land and Maritime Connectivity Project Distribution of this document is restricted until it has been approved by the Board of Directors. Following such approval, ADB will disclose the document to the public in accordance with ADB’s Access to Information Policy. CURRENCY EQUIVALENTS (as of 7 May 2021) Currency unit – Solomon Islands dollar/s (SI$) SI$1.00 = $0.12 $1.00 = SI$7.95 ABBREVIATIONS ADB – Asian Development Bank ADF – Asian Development Fund COVID-19 – coronavirus disease DDR – due diligence report EMP – environmental management plan FAM – facility administration manual GAP – gender action plan GBV – gender-based violence IEE – initial environmental examination JICA – Japan International Cooperation Agency km – kilometer MFF – multitranche financing facility MID – Ministry of Infrastructure Development NDS – National Development Strategy NTF – National Transport Fund PMU – project management unit SIMA – Solomon Islands Maritime Authority NOTE In this report, "$" refers to United States dollars. Vice-President Ahmed M. Saeed, Operations 2 Director General Leah C. Gutierrez, Pacific Department (PARD) Deputy Director Emma M. Veve, PARD General Director Dong-Kyu Lee, Transport and Communications Division (PATC), PARD Team leader Tomoaki Kawabata, Transport Specialist, PATC, PARD Team members Maila Conchita M. Abao, Associate Project Officer, PATC, PARD Chandra Arora; Procurement Specialist; Procurement Division 2; Procurement, Portfolio and Financial Management Department Flordeliza R. Asistin; Financial Management Specialist; Portfolio, Results and Quality Control Unit (PAOD-PRQ), PARD Stella Bokelema; Senior Operations Assistant; Pacific Liaison and Coordination Office (PLCO); PARD Henry Cornwell, Counsel, Office of the General Counsel (OGC) Elmar Elbling, Infrastructure Specialist, PLCO, PARD Taniela Faletau, Safeguards Specialist, PAOD-PRQ, PARD Anna Fink, Economist (Regional Cooperation), Regional Cooperation and Integration Thematic Group, Sustainable Development and Climate Change Department (SDCC) Prabhjot R. Khan; Social Development Specialist (Gender and Development); Gender Equity Thematic Group; SDCC Mairi MacRae, Social Development Specialist (Gender and Development), Social Sectors and Public Sector Management Division, PARD Elma Morsheda, Infrastructure Specialist, PLCO, PARD Noelle O’Brien, Principal Climate Change Specialist, Energy Division, PARD Asghar Ali Syed, Principal Counsel, OGC Dalcy Tozaka, Senior Country Officer, PLCO, PARD Jean Williams, Principal Environment Specialist, PAOD-PRQ, PARDa Peer reviewer Andri Heriawan, Transport Specialist, Transport and Communications Division, South Asia Department a Outposted to the Pacific Subregional Office in Suva, Fiji. In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. CONTENTS Page PROJECT AT A GLANCE MAP I. THE PROPOSAL 1 II. RATIONALE 1 III. THE PROJECT 3 A. Impact and Outcome 3 B. Outputs 4 C. Summary Cost Estimates and Financing Plan 6 D. Implementation Arrangements 7 IV. DUE DILIGENCE 8 A. Technical 8 B. Economic and Financial 8 C. Governance 9 D. Poverty, Social, and Gender 9 E. Safeguards 10 F. Summary of Risk Assessment and Risk Management Plan 11 V. ASSURANCES 12 VI. RECOMMENDATION 12 APPENDIXES 1. Design and Monitoring Framework for the Project 13 2. List of Linked Documents 16 Project Classification Information Status: Complete PROJECT AT A GLANCE 1. Basic Data Project Number: 53421-001 Project Name Land and Maritime Connectivity Department/Division PARD/PATC Project Country Solomon Islands Executing Agency Ministry of Finance and Borrower Solomon Islands Treasury Country Economic https://www.adb.org/Documents/Lin Indicators kedDocs/?id=53421-001-CEI Portfolio at a Glance https://www.adb.org/Documents/Lin kedDocs/?id=53421-001-PortAtaGl ance 2. Sector Subsector(s) ADB Financing ($ million) Transport Road transport (non-urban) 44.66 Transport policies and institutional development 14.89 Urban roads and traffic management 44.66 Water transport (non-urban) 44.66 Total 148.88 3. Operational Priorities Climate Change Information Addressing remaining poverty and reducing inequalities GHG reductions (tons per annum) 0.000 Accelerating progress in gender equality Climate Change impact on the High Tackling climate change, building climate and disaster resilience, Project and enhancing environmental sustainability Making cities more livable ADB Financing Strengthening governance and institutional capacity Adaptation ($ million) 2.74 Fostering regional cooperation and integration Mitigation ($ million) 0.00 Cofinancing Adaptation ($ million) 0.00 Mitigation ($ million) 0.00 Sustainable Development Goals Gender Equity and Mainstreaming SDG 1.5 Effective gender mainstreaming (EGM) SDG 5.4 SDG 9.1 Poverty Targeting SDG 10.1 General Intervention on Poverty SDG 13.a 4. Risk Categorization: Complex . 5. Safeguards Categorization Environment: B Involuntary Resettlement: B Indigenous Peoples: C [Tranche 1] . 6. Financing Modality and Sources Indicative Tranches ($million) Amount I II III ($million) ADB 148.88 Sovereign Project grant: Asian 19.46 28.00 27.00 74.46 Development Fund Sovereign MFF-Tranche 24.42 25.00 25.00 74.42 (Concessional Loan): Ordinary capital resources Cofinancing 0.00 None 0.00 0.00 0.00 0.00 Counterpart 21.83 Government 5.27 7.45 9.11 21.83 Total 49.15 60.45 61.11 170.71 Currency of ADB Financings: US Dollar Source: Asian Development Bank 22012021150039375229 This document must only be generated in eOps. Generated Date: 01-Jun-2021 14:29:59 PM PROJECT AT A GLANCE 7. Country Operations Business Plan CPS https://www.adb.org/documents/pacific-approach-2016-2020 COBP https://www.adb.org/documents/pic-11-country-operations-business -plan-2021-2023 8. Investment Program Summary The project is to rehabilitate or upgrade about 35 kilometers of urban and rural roads in Honiara city and the surrounding regions in Guadalcanal Province, construct 2 rural wharves, and reconstruct and strengthen an old wharf in Honiara port. The objective is to improve connectivity, efficiency, and disaster resilience of transportation network in Solomon Islands. The east-west Guadalcanal road corridor is in deteriorating condition, critical urban road sections have capacity constraints leading to traffic congestion, and inadequate maritime facilities aggravating efficiency of shipping services. The proposed project will provide road and maritime infrastructure, ensuring access to basic services, increase income generating opportunities, and promote social cohesiveness. Impact: Access to essential services and productive resources and markets provided to all Solomon Islanders (National Development Strategy, 2016-2035). Outcome: Connectivity, efficiency, and disaster resilience of transportation network in Solomon Islands improved Outputs: (i)Road transport infrastructure rehabilitated and climate proofed, (ii)Maritime transport infrastructure constructed and made resilient to disaster risks, and (iii)Institutional capacity strengthened Implementation Arrangements: Ministry of Finance and Treasury will be the executing agency. Project Readiness: The feasibility study, detailed design, and tender documents will be prepared by a consulting firm financed under the ongoing Transport Sector Project Development Facility, which was mobilized in February 2019. The consulting firm will prepare the design for all components of the project and the outputs will be reviewed by MID, ADB, and an independent design review consultant. Advance contracting will be undertaken for civil works and consulting services. Therefore, high project readiness is expected to be achieved. 9. Milestones Modality Estimated Approval Estimated Completionb Multitranche financing facility 4 June 2021 31 December 2028 Tranche I 4 June 2021 31 December 2022 Tranche II 18 November 2022 31 December 2025 Tranche III 19 November 2025 31 December 2028 10. Project Data Sheet (PDS) PDS c http://www.adb.org/projects/53421-001/main a Multitranche Financing Facility (MFF). b For MFF, this refers to the end of the availability period; for tranches, this refers to the tranche closing date. c Safeguard documents can be viewed by clicking the Document's hyperlink in the Project Data Sheet (PDS) page. Source: Asian Development Bank 22012021150039375229 This document must only be generated in eOps. Generated Date: 01-Jun-2021 14:29:59 PM 156o 00'E 166o 00'E SOLOMON ISLANDS LAND AND MARITIME CONNECTIVITY PROJECT MANILA (Philippines) , km HAWAII (United States) , km 6o 00'S CHOISEUL 6o 00'S PROVINCE Taro S O U T H P A C I F I C O C E A N Manning Strait ISABEL PROVINCE SYDNEY Buala (Australia) Gizo , km MALAITA CENTRAL Auki PROVINCE WESTERN Blanche Channel PROVINCE Tulaghi PROVINCE Indispensa HONIARA ble Strait GUADALCANAL PROVINCE Kira Kira TEMOTU S o l o m o n S e a Lata PROVINCE Ahanga MAKIRA-ULAWA Tingoa PROVINCE 12o 00'S o RENNELL AND BELLONA 12 00'S PROVINCE (project port and wharf) 156o 00'E 166o 00'E Project Port Project Wharf National Capital N Project Road Provincial Capital 0 100 200 Road Project: JICA Financing HIR Honiara International Airport Top Map Scale Major Road JICA Japan International Cooperation Agency